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Landmark note sold

Highlights:

Buyers purchase Landmark note.

Price wasn’t disclosed.

Note sale includes 108 condo units.

The Landmark

Two out-of-state groups have purchased the note on the bankrupt Landmark condo tower and retail center in Greenwood Village, which was developed by disgraced developer Zack Davidson, who committed suicide earlier this year.

The $100 million loan was purchased by New York-based Neuberger Berman and Strategic Value Partners (SVP Global) of Greenwich, Ct., sources confirmed on Monday.

The transaction was handled by the Denver office of Holliday Fenoglio Fowler, L.P, better known as HFF, which marketed the loan on behalf of a consortium of banks.

The main lender on the project was Hypo Bank Real Estate Corp., which was taken over by the German government during the financial crisis in 2009.

HFF officials signed a non-disclosure statement and could not make any comment on the buyers of the note or the sale price. One source, however, said he had heard the note sold for more than $70 million, and possibly more than $75 million. That could not be confirmed.

The HFF team representing the seller was led by director Brock Cannon, senior managing director Eric Tupler and real estate analyst Matt Gangaware.

There was a great deal of interest in the note from prospective purchasers, Cannon said, without giving any specifics on the transaction.

He said prospective buyers were impressed by the great location along Interstate 25 and Belleview Avenue, the quality of the construction, the great roster of retail tenants and the development opportunity on vacant land.

The retail portion of the property totals 144,325 square feet and is anchored by Landmark Theatre. Other tenants include Ted’s Montana Grill, Hapa Sushi, Pure Barre and the Comedy Works.

The community includes 271 luxury condominium units in the Landmark and Meridian towers. Of those, 108 units were included in the loan sale.

At the Landmark Tower, units which range from 1,284 square feet to 2,004 square feet, are priced from $499,000 to $735,000. Monthly HOA fees run from $653 to slightly more than $1,000.

At the Meridian, units are priced from $385,000 to $1.09 million, for units that range in size from 1,286 square feet to 2,470 square feet. Monthly HOA fees at the Meridian range from $443 to $1,235.

The property also includes a 1.12-acre development parcel zoned for up to 10,000 square feet of retail development.

As part of the note purchase, the new owners also are seeking to replace Andy Miller and David Frishman as receivers, with Denver-based East West Urban Management.

The company manages a number of properties in Riverfront Park in the Central Platte Valley, which was developed by its parent company, East West Partners.

One person who has been following the Landmark saga closely, said that he is hopeful the new note holder group will better for current condo owners, future buyers and retail tenants.

“The whole ownership group has been up in the air, so it is nice to have that squared away,” he said.

“Clearly, it’s better than having a government-backed German bank with really no assets of its own in charge. Every decision they made had to go through New York. Hopefully, the new note owner will put a long-term plan in place. I guess it remains to be seen, long-term, if they are better, but I think people are hopeful.”

SVP, on its website, said it takes a hand-on approach to its investments.

“SVP attempts to exert meaningful influence in the restructuring and post-restructuring activities of its investments. SVP expects to take active roles on ad hoc or formal creditors’ committees during restructurings, sit on boards, and deploy our operating partners as needed,” according to its website.

SVP, which has a $1.6 billion hedge fund strategy and $2.1 billion in private equity capital, said it believes the distressed debt market is inefficient and it has the skills needed to profit from the opportunities presented.

“We will typically make investments at the top end of the capital structure (senior debt, or senior secured debt, typically private bank debt) at a substantial discount to par and what we believe is its intrinsic value,” the company said. “The focus is on fundamentally sound businesses with characteristics such as leading market shares, high customer switching costs, hard assets, significant barriers to entry, and established franchises, but which are experiencing financial, managerial, or operational issues and are often undergoing, or about to undergo, a restructuring.”

Neuberger Berman, founded in 1939, has $214 billion in assets under management, much of it with mutual funds. However, it also will make direct investments under its “alternatives” strategy.